Market Roundup
- EUR/USD -0.03%, USD/JPY -0.12%, GBP/USD 0.01%, EUR/GBP -0.04%
- DXY 0.03%, DAX 0.53%, FTSE 0.19%, Brent -0.42%, Gold -0.1%
- Mexico, U.S. closing in on NAFTA deal, talks to resume Monday
- Yuan hits 4-week high as China signals support, revives X-factor for fixing
- Turkish lira slides 3 percent as markets reopen, eyes on U.S. stand-off
- Germany Aug Ifo Business Climate New, 103.8, 101.9 forecast, 101.7 previous
- Germany Aug Ifo Current Conditions New, 106.4, 105.4 forecast, 105.3 previous105.4 revised
- Germany Aug Ifo Expectations New, 101.2, 98.5 forecast, 98.2 previous
- Much detail, little progress in U.S.-China talks, sources say
- World Court hears Iran lawsuit to have U.S. sanctions lifted
- China warns investment may weaken further, to make "good use" of fiscal policy
- China's July industrial profit growth cools for 3rd straight month
- Oil falls ahead of OPEC+ monitoring committee call
Economic Data Ahead
- (0830 ET/1230 GMT) The Federal Reserve Bank of Chicago will release its Chicago Fed National Activity Index (CFNAI) for the month of July. The index stood at 0.43 in the prior month.
- (1030 ET/1430 GMT) The Dallas Fed releases its Manufacturing Business Index for the month of August. The index posted a decline of 32.3 percent in the previous month.
Key Events Ahead
- No significant events scheduled
FX Beat
DXY: The dollar index edged up, boosted by a prospective U.S.-Mexico trade deal and the Federal Reserve's stance on interest rates. The greenback against a basket of currencies trades 0.05 percent up at 95.19, having touched a low of 94.93 on Wednesday, its lowest since August 2. FxWirePro's Hourly Dollar Strength Index stood at -17.33 (Neutral) by 1000 GMT.
EUR/USD: The euro eased after rising to an over 3-week peak as the greenback bounced back on comments from the Federal Reserve chairman in support of a gradual approach to hiking interest rates despite President Donald Trump's criticism of higher borrowing costs. The European currency traded 0.1 percent down at 1.1610, having touched a high of 1.1653 earlier, its highest since August 2. FxWirePro's Hourly Euro Strength Index stood at 126.21 (Highly Bullish) by 1000 GMT. Immediate resistance is located at 1.1667 (August 2 High), a break above targets 1.1747 (July 31 High). On the downside, support is seen at 1.1561 (5-DMA), a break below could drag it till 1.1472 (10-DMA).
USD/JPY: The dollar trimmed losses to trade above the 111.00 handle as risk sentiment improved on signs U.S. and Mexican negotiators were closing in on a common position on the North American Free Trade Agreement (NAFTA). The major was trading 0.1 percent down at 111.12, having hit a high of 111.48 on Friday, its highest since August 6. FxWirePro's Hourly Yen Strength Index stood at -83.14 (Slightly Bearish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the Chicago Fed National Activity Index and Dallas Fed Manufacturing Business Index. Immediate resistance is located at 111.52 (August 6 High), a break above targets 111.73 (August 2 High). On the downside, support is seen at 110.68 (5-DMA), a break below could take it lower 110.31 (August 17 Low).
GBP/USD: Sterling was stuck within narrow ranges as trading volumes remain thin on account of Summer Bank Holiday. The major traded flat at 1.2843, having hit a high of 1.2936 on Wednesday; it’s highest since August 8. FxWirePro's Hourly Sterling Strength Index stood at -99.18 (Slightly Bearish) 1000 GMT. Immediate resistance is located at 1.2936 (August 22 High), a break above could take it near 1.3006 (August 6 High). On the downside, support is seen at 1.2789 (10-DMA), a break below targets 1.2729 (August 20 Low). Against the euro, the pound was trading flat at 90.39 pence, having hit a low of 90.58 earlier, it’s lowest since September 2017.
USD/CHF: The Swiss franc edged down, reversing some of its previous session gains as U.S. and Mexican trade negotiators appeared close to reaching an accord on the North American Free Trade Agreement (NAFTA). The major trades up at 0.9832, having touched a low of 0.9808 on Wednesday, it’s lowest since June 8. FxWirePro's Hourly Swiss Franc Strength Index stood at 114.93 (Highly Bullish) by 1000 GMT. On the higher side, near-term resistance is around 0.9875 (38.2% retracement of 0.9982 and0.9808) and any break above will take the pair to next level till 0.9895 (50.0% retracement). The near-term support is around 0.9810 and any close below that level will drag it till 0.9785.
Equities Recap
European shares gained, as signs of progress on the U.S.-Mexico NAFTA trade deal underpinned market sentiment, while the greenback steadied on comments by the Fed Chair Powell at a closely watched Jackson Hole symposium.
The pan-European STOXX 600 index advanced 0.2 percent at 384.32 points, while the FTSEurofirst 300 index surged 0.3 percent to 1,504.57 points.
Britain's FTSE 100 trades 0.2 percent up at 7,577.49 points, while mid-cap FTSE 250 gained 0.1 percent to 20,691.41 points.
Germany's DAX rose 0.4 percent at 12,442.18 points; France's CAC 40 trades 0.3 percent higher at 5,449.70 points.
Commodities Recap
Crude oil prices declined amid concerns over the U.S.-China trade dispute that would erode global economic growth; however, looming U.S. sanctions against Iran's oil sector limited downside. International benchmark Brent crude was trading 0.2 percent down at $75.52 per barrel by 1022 GMT, having hit a high of $76.39 on Friday, its highest since July 11. U.S. West Texas Intermediate was trading 0.2 percent lower at $68.39 a barrel, after rising as high as $69.29 on Friday, its highest since August 8.
Gold prices eased as the dollar rebounded after comments from the Federal Reserve chairman supported a gradual approach to hiking interest rates. Spot gold was 0.2 percent down at $1,203.74 per ounce at 1025 GMT, having gained about 1.7 percent to hit a high of $1208.52 on Friday, its highest since August 13. U.S. gold futures were down 0.2 percent at $1,210.60 an ounce.
Treasuries Recap
The German bunds slumped during European session after the country’s Ifo business climate index cheered market participants. Investors will now focus on the country’s 5-year auction and August employment report, due later this week for further direction in the debt market. The German 10-year bond yields, which move inversely to its price, jumped nearly 2 basis points to 0.359 percent, the yield on 30-year note also climbed close to 2 basis points to 1.028 percent and the yield on short-term 2-year too gained 1 basis point to -0.601 percent.
The Japanese government bonds traded tad higher as investors wait to watch the country’s retail sales and industrial production for the month of July, scheduled to be released on August 29 and 30 by 23:50GMT respectively. The yield on the benchmark 10-year JGB note, which moves inversely to its price, slipped 1/2 basis point to 0.096 percent, the yield on the long-term 30-year note fell 1 basis point to 0.832 percent and the yield on short-term 2-year remained flat at -0.114 percent.
The Australian bonds remained range-bound at the start of the trading week as investors remained side-lined in a muted session that witnessed data of little economic significance. Also, the country’s domestic political situation still remains topsy-turvy, with a change in leadership, following a parliamentary chaos last week. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, traded flat at 2.546 percent, the yield on the long-term 30-year bond hovered around 3.072 percent and the yield on short-term 2-year rose 1/2 basis point to 2.008 percent.
